UOB Kay Hian Private Wealth Management
Date of Report: September 5, 2025

Global Markets Surge as Fed Rate Cut Nears, Tech Giants Lead, and China Faces Renewed Volatility

Executive Market Summary

The latest market movements reveal a compelling narrative: U.S. equities hit record highs, driven by expectations of a Federal Reserve rate cut, while China contends with regulatory intervention after a massive rally. Meanwhile, major tech firms and AI players are making headlines with strategic deals, earnings announcements, and influential gatherings at the highest levels of government. This comprehensive report covers all key regions, sectors, and companies shaping the current investment landscape.

Market Indices & Key Financial Instruments

Macro & Policy Highlights

• U.S. Markets: The S&P 500 reached a record high, propelled by weaker-than-expected private payrolls, fueling expectations for a 25-bps Fed rate cut in September. The unemployment rate is forecasted to rise to 4.3%.
• China: The CSI 300 dropped 2.12% as authorities weigh interventions to rein in speculative trading after a \$1.2 trillion rally. Measures considered include loosening short-selling restrictions and curbing speculative activity.
• Trade Developments: The U.S. implemented a new trade deal with Japan, placing 15% tariffs on most imports, including autos. Japan has committed to a \$550 billion U.S. investment fund. Mexico is considering new tariffs on China and other non-partners.
• White House Tech Dinner: President Trump hosted a high-profile dinner with over two dozen tech and business leaders, including CEOs from Meta, Microsoft, Apple, Alphabet, Oracle, Micron, AMD, and OpenAI.

U.S. & Americas: Company Highlights and Sector Trends

Meta (META) & Microsoft (MSFT): Core Recommendations

• Meta rose 1.57%, Microsoft up 0.52%. Both companies are highlighted as core recommendations due to their robust performance and central role in ongoing tech sector leadership.

OpenAI & Broadcom (AVGO): AI Chip Expansion

• OpenAI is set for mass production of its proprietary AI chips in partnership with Broadcom, which secured \$10 billion in orders from this deal. Broadcom shares soared 4.1% post-earnings, with Q4 AI semiconductor revenue guided at \$6.2 billion, above analyst estimates. Broadcom is also a core recommendation.

Amazon (AMZN): Innovation and Connectivity

• Amazon led M7 stocks with a 4.29% gain as it piloted its new AI-powered workspace platform, Quick Suite. JetBlue will be the first airline to adopt Amazon’s Project Kuiper satellite network for in-flight Wi-Fi. Amazon remains a core recommendation.

Nasdaq (NDAQ): Regulatory Overhaul

• Nasdaq is introducing stricter listing standards, raising the minimum public float and streamlining delisting for thinly traded firms, especially for companies primarily operating in China, which now must raise at least \$25 million in public proceeds to qualify for listing.

Lululemon (LULU): Guidance Cut

• Lululemon shares plunged 15.6% after hours as it cut its full-year revenue and earnings outlook for the third consecutive time, citing a \$240 million hit from the end of the de minimis exemption.

Salesforce (CRM): Investor Concerns

• Despite announcing a \$20 billion share buyback, Salesforce fell 4.85% after guiding Q3 revenue below expectations, reflecting delayed returns from its AI investments.

Tesla (TSLA): UK Sales Surge

• Tesla’s UK new car registrations rose 7.63% in August, with battery electric vehicle sales up 15% according to SMMT, and New AutoMotive data showing a 20% rise for BEVs.

Oracle (ORCL): Earnings Preview

• Oracle will report Q1 FY26 earnings post-market on September 9. The implied move is 8.8%. Oracle missed earnings last quarter by 3.66% but has averaged a 1.9% surprise over the past four quarters.

Boeing (BA): Labor Disputes

• Boeing Defense will hire new workers to replace striking IAM members in St. Louis. Non-union staff have kept production running since the strike began on August 4.

Intel (INTC): Manufacturing Roadmap

• Intel highlighted 2026 as pivotal for advancing to its 14A manufacturing process but will only build 14A capacity with external customer commitments. The company is majority-owned due to an \$8.9 billion U.S. government stake, limiting outside investment for now.

ExxonMobil (XOM): European Asset Review

• ExxonMobil is exploring the sale of its chemical plants in the UK and Belgium, targeting up to \$1 billion in asset sales amid sector pressure from U.S. tariffs and Chinese competition.

Caterpillar (CAT): Norway Wealth Fund Divestment

• The \$2 trillion Norwegian wealth fund divested from Caterpillar on ethical grounds related to its products’ use by Israeli authorities.

Nvidia (NVDA): Quantum Computing Investment

• Nvidia’s venture arm made its first investment in Quantinuum, valuing the Honeywell-controlled quantum computing firm at \$10 billion.

Vale (VALE): Mining Expansion

• Vale will invest 67 billion reais (\$12.36 billion) in Minas Gerais mining operations by 2030, focusing on expanding filtering and dry stacking of iron ore tailings.

China & Greater China: Regulatory Shifts and Sector Outlooks

Alibaba (BABA, 9988.HK) & ByteDance: Nvidia Chip Demand

• Despite government pressure, Chinese tech leaders remain keen on Nvidia’s H20 chips. They closely monitor Nvidia’s plans for a more powerful B30A chip. Alibaba and Nvidia are core recommendations.

China Automobile Sector: Price War and Outlook

• The recent price war squeezed margins for Chinese automakers in Q2 2025. Geely, CATL, and Fuyao Glass maintained margins through product competitiveness. Young firms like XPeng and Leapmotor are expected to survive and thrive. Top BUYs: CATL and Geely. Top SELLs: BYD and Li Auto. Market Weight maintained.

BYD (1211.HK): Growth Slowdown

• BYD cut its 2025 sales target by up to 16% to 4.6 million vehicles, facing its slowest annual growth in five years.

Sun Hung Kai Properties (0016.HK): Earnings Stability

• FY25 underlying net profit rose 0.5%, supported by strong China development margins and lower finance costs, despite weaker Hong Kong margins. Hong Kong offices outperformed, and new properties in Hong Kong and Shanghai are set to boost recurring income in FY26. The management is committed to a 50% payout ratio. BUY maintained, with a target price of HK\$103.00, implying a 4.0% FY26 yield.

Cambricon (688256 CH): AI Rally Cools

• Cambricon shares plunged 14.45% as the China AI rally cooled, helping drag the Star 50 Index down 6.1%. The selloff highlights market wariness following a surge in tech valuations.

Asia ex-China: Construction and Tourism Trends

BRC Asia (BRC SP): Construction Proxy

• BRC is expected to benefit from rising steel demand amid accelerating Singapore construction activity. Its record S\$2 billion orderbook, including major projects like Changi Airport T5, underpins strong earnings visibility. The company offers a robust FY26 dividend yield of 5.3%. The recommendation is upgraded to BUY with a target price of S\$4.69, 43% above current levels.

Thailand Hotels: 4Q25 Hope

• Thai hotel stocks posted a combined core profit of Bt3,767 million for 2Q25 (+0.4% yoy, +101.3% qoq), mainly from MINT’s strong European performance. 3Q25 is expected to remain subdued, but 4Q25 high season bookings show promise. MINT remains the top pick for its lower cost of debt. Market Weight maintained.

EMEA & Other Markets: Sector Movements

European Equities: Volatility Amid Sector Worries

• STOXX 600 steadied (+0.61%) as investors exercised caution. Jet2’s shares dropped 12.52% after signaling full-year profit at the low end of guidance, dragging the travel sector lower.

Sanofi (SAN FP): Drug Development Setback

• Sanofi shares tumbled 8.31% on weak trial results for amlitelimab, developed for atopic dermatitis. The company’s blockbuster Dupixent, set to lose patent protection in 2031, currently covers this indication.

Volvo (VOLVB SS): Sales Decline

• Volvo’s August car sales fell 9% to 48,029 units. Fully electric vehicle sales dropped 28% and accounted for 20% of total volume; electrified cars as a whole were down 17%, comprising 43% of total volume. The company previously reported a sharp profit drop amid weak demand and tariff challenges.

IPO Watch: Hong Kong Calendar

Key Events to Watch

• Sep 3-5: Goldman’s Asian Leaders Conference, Hong Kong
• Sep 4-9: CoCreate 2025 Pitch Event, Las Vegas (Alibaba)
• Sep 5: US August Labor Data (NFP/Unemployment Rate)
• Sep 7: China August FX Reserves

Conclusion

This period is marked by significant inflection points: record highs in U.S. equities amid dovish Fed expectations, strategic industry shifts in technology and AI, and a complex mix of policy, competition, and volatility in China and beyond. Investors should closely monitor upcoming labor data, tech sector earnings, and regulatory changes for opportunities and risks in this dynamic landscape.

Disclaimers

This article is for informational purposes only and does not constitute investment advice or a solicitation to buy or sell securities. Please consult a professional adviser for personalized financial guidance.